Broadcom, in what can only be perceived as a totally unexpected turn of events, has offered a bid of a whopping $130 bn to buy off Qualcomm. If this deal goes through, it would in-arguably be the biggest takeover in the Semiconductor industry(and believe me, the semiconductor industry has seen more than its fair share of high priced deals!), and would catapult Broadcom to the third position of the World’s largest chip makers (behind Intel and Samsung).
Broadcom’s offer of $70 per share to Qualcomm Stockholders would be broken down to $60 per share in cash and $10 per share of Broadcom. Broadcom says this is a 28% premium over the closing price of Qualcomm common stock on November 2.
In a press statement, Broadcom president and CEO Hock Tan presented the following views on the bid:
“This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products,”
“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination,”
“With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.”
While it seems natural to be skeptical of this deal going anywhere, the fact remains that Qualcomm is amidst an intense legal tiff with Apple, and has just been fined heavily by the Taiwanese FTC for unfairly licensing out it’s patents. So, the timing of this bid couldn’t be any better for both parties.
In a news release on Monday, Qualcomm said that their board of directors will assess the bid to pursue the course of action that would be in the best interests of Qualcomm shareholders.